Oil investments down on Asian market, as Greece calls for a referendum
Crude oil futures extended their recent losing streak to a third consecutive session on the commodities market, after MF Global, a prolific U.S. brokerage firm declared bankruptcy due to bad betting on the euro zone debt crisis. Worse than expected manufacturing reports from China and a stronger U.S. dollar also pushed oil investments down on the commodity index.
After an initial rally that crude oil prices posted on the market late last week following Europe’s debt deal announcements, investors have expressed their doubts concerning the longevity and viability of the region’s plan of attack. Europe’s prolonged struggle with its rapidly spiralling debt has been a crucial affecting factor in the volatility and steady declines that crude oil displayed on the commodities market over the year. The commodity oil rallied on the charts after Europe first revealed its debt strategy, however after the first few days, growing concerns began to emerge.
The Greek Prime Minister George Papandreou has announced a referendum concerning the region’s aid and expansion plans. The call for a referendum from the ailing nation, coupled with MF Global’s bankruptcy file fuelled trader scepticism over Europe’s debt deal and caused a tumble of oil investments on the commodity index.
WTI crude oil futures for delivery in December are down 44 cents at $92.75 per barrel in electronic trading on the New York Mercantile Exchange. The U.S. benchmark commodity futures rose more than 17% over the course of October in anticipation of Europe’s plan.
Brent crude oil prices for settlement in December are down 26 cents at $109.30 per barrel on the ICE Futures Exchange in London. The spread between the two benchmark commodity oils is now less than $18 per barrel.
With doubts mounting over Europe’s debt deal, a strengthening dollar and a pessimistic short term outlook for China’s economic growth, crude oil futures and oil investments may have another round of downswings ahead.